Employees talk pension worries

Could the town’s general employees pension plan be frozen Jan. 1?

That was the concern expressed by the three employee representatives who hold seats on the General Employees Pension Board of Trustees at the board’s Friday, Aug. 3 quarterly meeting.

They agreed that they would ask the Longboat Key Town Commission to hold off on imposing changes to their plan until they have more information.

And, they agreed that general employees should speak up.

“I would ask any employees who have these concerns to put a public face on the issue for the general employees,” said Board Chair Donna Spencer, one of the three employee trustees. “We have not done that. We have not been encouraged to do that.”

The Jan. 1 date is on employees’ minds because Bullock said in May that he would ideally freeze the town’s pension plans by the end of the calendar year.

But because collective bargaining units represent police officers and firefighters, all changes to their pension plans must take place through union negotiations.

The police contract doesn’t expire until September 2013, so the town won’t begin discussing changes to that plan until the spring. Firefighter contract negotiations are ongoing but are likely to be drawn out. Firefighter union representatives have said they’re willing to go to impasse with the town if necessary over proposed changes to their plan.

As a result, the general employees plan could be the only fund that the town could freeze by the end of the calendar year, although Bullock has said he hopes to transition bargaining and non-bargaining employees at a similar pace.

The board voted 4-0 to authorize Spencer to draft a letter asking Bullock for cost comparisons between the plan he proposed to freeze the pension plan and switch employees to 401(a) accounts versus a pension plan that would be closed to new hires while allowing current employees to continue accruing pension benefits.

Employee trustee Steve Schield pointed out that freezing the plan would cost more in the short term. The plan would lose the current 6% that employees contribute from their salaries, and amortization rates would likely have to go down.

Employee trustees also discussed figures that suggest their plan is in better shape than the other plans, with an average unfunded liability of $77,000 per member compared to the firefighters’ $343,000 per member.

“The trend is the same deep slope in the same direction,” countered the town’s finance director, Tom Kelley.
The board also voted 3-1, with resident trustee Larry Linhart opposing, to authorize attorney Lee Dehner to draft a letter asking the commission to delay changes until all three plans can move forward at the same time.

Resident trustee Ron McDonough had to leave the meeting before either vote took place.

Bullock has been on vacation for two weeks and was not present at Friday’s meeting. When contacted by the Longboat Observer, he declined to comment on whether a Jan. 1 freeze date is still his goal.

“Much of it depends on collective bargaining,” he said. “That’s always been a target, but I can’t do anything more than target.